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Cloud computing surges in the UAE in 2019

Cloud computing take-up saw a significant acceleration in the Middle East throughout this year

The past 12 months has seen a rapid growth of cloud computing in the United Arab Emirates (UAE) as suppliers race to set their footprints.

Microsoft and Oracle launched datacentres in the country in 2019, adding to existing UAE centres offered by SAP and Alibaba Cloud. Amazon Web Services (AWS) also unveiled its first Middle Eastern datacentre in nearby Bahrain in July.

SAP is the current front-runner in the Middle East race with three centres in the region in Dubai, Riyadh and Dammam, while Oracle opened its first datacentre in the Middle East in Abu Dhabi in February to offer cloud storage to customers across the region. In a show of serious intent, Oracle is set open two more datacentres in the UAE and two in Saudi Arabia within the next year.

Meanwhile Microsoft brought online its first datacentre regions in the Middle East in June this year, opening one in Dubai and Abu Dhabi. Comparatively a smaller player, Alibaba Cloud – cloud computing arm of the Chinese ecommerce giant – opened its first regional datacentre in Dubai in 2016.

According to a recent YouGov survey of more than 500 IT decision-makers in the UAE, 88% planned to increase cloud spend in 2019, 83% are running partially or completely in the cloud in 2019, and nearly 90% expect cost savings on the cloud.

The public cloud services market in the Middle East and North Africa (MENA) is projected to grow to $1.9bn (AED7.97bn) by 2020, double what it was in 2016, according to data research firm Statista.

According to Jyoti Lalchandani, group vice-president and regional managing director for the Middle East, Turkey and Africa at IDC, the arrival of several new datacentres in the UAE in 2019 foretells a “transformational year for the country”.

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Lalchandani told Computer Weekly: “The fact that several tech suppliers have entered the UAE shows that there is a changing landscape. This trend shows there is a strong national focus on public cloud services. The datacentres are arriving in the region to fulfil the demand from local customers.”

He noted that local companies are now moving their “mission critical” services to the cloud, which is evidence of growing trust in remote hosting centres. “Very traditional organisations such as the Commercial Bank of Dubai have moved all their sensitive data to the cloud. I foresee other banks doing the same,” he said.

 As UAE cloud uptake grows, Lalchandani also predicted a heightened focus on security and regulations. “With all these providers coming in, there might more regulatory frameworks put in place. I predict the government will become more involved in cloud regulations.”

Landmark year

According to Zakaria Haltout, managing director at SAP in the UAE, 2019 has been a “landmark year” for cloud computing in the UAE.

Haltout said every industry vertical in the UAE is undergoing digital transformation through the cloud, especially sectors such as oil and gas, utilities, government, retail, passenger travel, and financial services. “More and more public and private sector organisations are digitally transforming on the cloud,” he said.

The SAP MD said the company’s local cloud datacentre in the UAE is the “centrepiece” of its ongoing five-year $200m UAE investment plan. SAP was the first multi-national business applications company to go live in the country and onboard customers with localised data centre solutions.

Haltout predicts continued and rapid cloud services growth in the UAE, particularly as local organisations embrace the experience economy and personalise customer experiences with cloud-based solutions, rather than merely selling products and services. “UAE organisations that leverage customer experience solutions on the cloud are set to see the biggest business benefits,” said Haltout.

 He said the upcoming Expo 2020 Dubai will offer companies opportunities to experiment with cloud projects. The event, which will run on SAP to optimise processes and costs, is expected to deliver personalised experiences for 25 million visitors and 192 participating countries.

Looking ahead, Haltout said the biggest challenge for cloud take-up in the UAE lies in “implementation” issues.“The biggest challenge is not in business vision for the cloud, but in its implementation. Channel partners play a key role in supporting UAE organisations to understand the business challenges that organisations face, and which cloud solutions best meet business needs.”

According to Haltout, CIOs should work with channel partners to develop strategies for change management and skills development, to ensure that employees can optimise their cloud-based workplaces and business applications.

Cloud-ready

Jayakumar Mohanachandran, head of IT at Dubai-based packaging firm Precision Group, said many companies in the UAE are now ready to take advantage of cloud benefits, such as quick deployment of IT resources, shared resource usage, and the ability to monitor usage.

Mohanachandran, who is currently managing a large-scale digital transformation project at Precision Group, said cloud migration has enabled his firm to build a solid foundation for future growth plans.

“Precision was running on a legacy system for more than 25 years and this migration has helped us to be more agile and flexible. Now all our employees can work from any part of the world and stay connected all the time with all their information available at their fingertips. Employees can manage, monitor or approve all requests through mobiles which is a huge transformation for us.”

Santhosh Rao, senior director analyst, Gartner UAE, predicted that many more local companies will shift their data to UAE cloud centres.

“We expect a steady stream of projects where enterprises engage advisors to come up with cloud migration strategies. The UAE is transforming from an oil economy to data economy, so there is a need to create new revenues streams such as artificial intelligence. Cloud is a really nice way to kick things off… it’s a good way to start the transformation with less risk.”

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